{
  "title": "Market Power in the Middle East",
  "publication": "IMF Working Papers, January 10, 2025",
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  "summary": "The Middle East (ME) is often perceived as region with rentier economies and uncompetitive markets. Evidence of market power in the region however is scant. In this paper, we ask the following three questions: Is the ME uniquely uncompetitive?",
  "sections": [
    {
      "heading": "Overview and research questions",
      "content": "- Authors: Yevgeniya Korniyenko, Ahmed K Tohamy, Weining Xin\n- Publication date: January 10, 2025\n- Paper asks three questions:\n  - Is the Middle East (ME) uniquely uncompetitive?\n  - Has the evolution of market power in the region traced the global rise in market power?\n  - What government policies and actions influenced market power in the region and can taxes be a way to even the playing field?"
    },
    {
      "heading": "Data and methods",
      "content": "- Data:\n  - Comprehensive firm-level data from Compustat between 2004 and 2022.\n- Estimation approaches:\n  - Two methods for estimating markups:\n    - Production function approach.\n    - Cost-share approach."
    },
    {
      "heading": "Key findings",
      "content": "- Market power comparisons:\n  - Market power among listed firms in the ME is higher than in the US.\n  - Market power in the ME is on a downward trend.\n- Policy impact:\n  - Value-added tax (VAT) reforms introduced by some Gulf states from 2018 to 2022 resulted in a reduction of market power.\n  - Reduction in market power from VAT is identified as an additional benefit beyond increasing fiscal space."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Policymakers should continue to use available regulatory levers to achieve economic efficiency and a level playing field.\n- VAT could be considered as an alternative instrument to reduce market power and improve competition, in addition to its fiscal role."
    },
    {
      "heading": "Subject tags and keywords (as listed)",
      "content": "- Subjects: Competition, Economic sectors, Financial markets, Inflation, Oil sector, Prices, Taxes, Value-added tax\n- Keywords: Competition, Firm Behavior, Global, Inflation, Market Power, market power in the Middle East, Markup, markups dynamics, markups estimate, markups in GCC country, Middle East, Oil sector, sample representativeness, Value-added tax\n\nIMF Working Paper No. 2025/001; Pages: 40; DOI: https://doi.org/10.5089/9798400296871.001; ISBN: 9798400296871; ISSN: 1018-5941.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2025/01/10/market-power-in-the-middle-east-559692"
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    "Authors: Yevgeniya Korniyenko, Ahmed K Tohamy, Weining Xin",
    "Published: January 10, 2025",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400296871.001",
    "Authors: Yevgeniya Korniyenko, Ahmed K Tohamy, Weining Xin",
    "Publication date: January 10, 2025",
    "Paper asks three questions:",
    "Data:",
    "Estimation approaches:",
    "Market power comparisons:",
    "Policy impact:",
    "Policymakers should continue to use available regulatory levers to achieve economic efficiency and a level playing field.",
    "VAT could be considered as an alternative instrument to reduce market power and improve competition, in addition to its fiscal role.",
    "Subjects: Competition, Economic sectors, Financial markets, Inflation, Oil sector, Prices, Taxes, Value-added tax",
    "Keywords: Competition, Firm Behavior, Global, Inflation, Market Power, market power in the Middle East, Markup, markups dynamics, markups estimate, markups in GCC country, Middle East, Oil sector, sample representativeness, Value-added tax",
    "**Working Paper**"
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